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About ten years ago, I
found myself in severe credit card debt. I was young and didn't have
a proper understanding on how to use credit responsibly, but a big
part of the problem came when I lost my job in 2002 and had to live
off of my cards for several months. I took a commission sales job
because I could not find anything else and was not reimbursed for any
of my expenses. By the time I got a decently-paying job, I'd already
gotten to the point where my accounts were frozen and collection
agencies had me on speed dial. I turned to a debt settlement agency
that promised to be able to negotiate with my creditors so that I
would end up paying less than what I really owed. By the time I
realized that my fees were going nowhere and that I'd been 'taken for
a ride', I had no other option but Chapter 7 bankruptcy. While
bankruptcy turned out to be much better than I thought it would be,
here are some agency warning signs I wish I'd known about.

-This may seem obvious,
but steer clear of an agency that is reluctant to give you a business
name and address. 'Scammish' companies usually don't give these so
they can avoid being detected by law enforcement and other 'watchdog'
agencies.

-If an agency claims to
be able to get you out of debt 'quickly and easily', think twice.
There is nothing 'quick' or 'easy' about getting out of debt; it
takes significant changes to your spending habits as well as strict
budgets and proper understanding of credit. If you're promised a
'quick fix' to your credit problems, steer clear.

-If a company claims to
be able to remove bankruptcies or negative information from your
credit report, walk away. It's one thing if the information is false
or the result of identity theft, but things that are true and
legitimate cannot be removed from a credit report. There may be an
'expiration date' (10 years for Chapter 7, 7 for Chapter 13) for
certain information, but there is no legal way to remove it.

-Consider the fees an
agency charges, if any. If they are too high for you or are called
'voluntary contributions', steer clear. Also, some states do not
allow agencies to charge for their services at all; North
Carolina (where I lived at the time) is one of those states. Check
the laws in your state.

-If they claim they can
lower your balance or payments by a significant margin, be wary. This
is rarely, if ever, true.

-Reputable agencies
will never insist on an immediate decision or claim to be able to
give you advice over the phone. Instead, they will sit down with you
to discuss your particular situation and give you tailored
advice. They will also give you time to think about your needs and
check out other companies. You don't want to wait too long
because issues like these are time-sensitive, but you should never
feel as though you have to decide right away.

These are tough times
we live in; the bleak outlook many of us have regarding our finances
can make us 'easy prey' for scammers. Most credit counseling agencies
are 'kosher' and are really there to help people get out of debt.
However, it helps to know what to look for when it comes to those
that aren't.

For more information, visit http://www.bbb.org/us/article/tips-on-choosing-a-credit-counseling-agency-6104